One Of The World’s Biggest Pharmaceutical Companies Splits In Two

GlaxoSmithKline, one of the world’s biggest pharmaceutical companies, announced that it will split in two Wednesday as part of a new joint venture with U.S.-based pharmaceutical giant Pfizer.

GlaxoSmithKline will split into two entities, one that sells prescription drugs and vaccines and another that sells consumer products like Sensodyne toothpaste, reported Reuters. Its consumer products business will be a joint venture with Pfizer, which was trying to get rid of its consumer business to focus on prescription drugs for about a year, reported the Wall Street Journal.

The decision surprised shareholders in both corporations, and GlaxoSmithKline shares jumped as much as 7 percent in London Wednesday, reported the WSJ.

She took charge of the United Kingdom-based pharmaceutical giant in 2017 and had seemed to indicate she did not want to split up GlaxoSmithKline before the decision was made public.

GlaxoSmithKline will hold a 68 percent stake in the new consumer health venture and Pfizer will hold the remaining 32 percent, reported WSJ. The partnership will create the biggest business in the consumer health industry, with the joint venture holding 7 percent of market share. That’s more than $9.8 billion, and nearly double the market share of rivals like Johnson & Johnson and Bayer, which have roughly 4 percent of market share.

First Minister of Scotland Nicola Sturgeon (R) talks with GlaxoSmithKline’s (GSK) new CEO Emma Walmsley as the First Minister pays a visit to officially open GSK’s new production building on October 22, 2018 in Montrose, Scotland. (Photo by Andy Buchanan – WPA Pool /Getty Images)

The deal will likely be closed “in the second half of 2019” and the joint venture finalized within three years, reported WSJ.

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